Optus Innov8, the Australian arm of Singtel Innov8’s $US150 million venture fund, is calling for applications for round two of its seed program, offering Australian startups funding and access to the telco’s extensive network and expertise.
Two Melbourne companies, 121cast and Venuemob, both participants in the University of Melbourne’s accelerator program, received investment in the first round, announced in November. They were selected from a pool of 80 applicants.
Ed Hooper, co-founder of 121cast, says the $250,000 investment his startup raised has helped recruit new staff, and build out the product. The company’s initial product, SoundGecko, is a text-to-audio tool. Hooper says in the past few days they team has soft-launched a new plugin for WordPress blogs, allowing readers to click a button and hear articles be read out loud. More than 100 sites are already using the feature.
However, 121cast will soon release a personalised radio platform, pulling in content from an individual’s social networks and their favourite news sites which can be presented alongside hyper-local content; promoting nearby events or providing a weather forecast.
The fund is looking to co-invest in Australian startups which are early-stage, and looking to raise an angel round. It will invest up to $250,000 per company. The amount of equity a startup would need to give up is determined case-by-case, however the fund’s preference is to use a convertible note, at a 20-30% discount. The focus is on startups which fit under the umbrella of mobility solutions, digital convergence, and digital disruption; in other words, startups which can are strategic for the telco.
“We are taking applications online using a questionnaire,” says Alfred Lo, Optus Innov8 Principal. “It should be a simple cut and paste from the investor deck for most startups.”
Shortlisted companies will be invited to pitch in front of more than 30 investors as well as Optus and Singel representatives in Sydney. Lo says companies that are considering pitching at events like Sydney Angels, Aurelius Digital or Innovation Bay, are the type of startups which should apply.
“What we’re saying is that we’re looking for late, early-stage companies — those looking for between $400,000 and under $1 million. It’s a classic angel round in, Australian terms.”
While Optus Innov8 still plans to only co-invest alongside other investors, it has changed the process to allow anyone to apply. Previously, startups needed to be personally referred from a pool of prominent investors, mentors or incubators.
“We’ve changed from requiring referrals to asking for two referees. We found some startups weren’t getting the attention of referrers, and the high-profile people were a little bamboozled by all the requests they were getting.”
Lo says ideally the fund will support four companies this time around, although it will depend on the type of applications that it receives. He emphasises the company’s desire to only offer smart money; an investment which can be supported by the extensive resources of Optus and Singtel.
He points to 121cast, which has already been able to leverage into the telco’s reach. It has been able to trial banner ads for its app on the Optus Zoo pages, test new releases with several thousand people on the Optus beta group, and tap into the expertise of staff. If they show some traction, Hooper says 121cast will be able to leverage the telco’s network of subscribers, totalling some 450 million across Asia.
Lo says down-the-track this support could extend to the pre-install of particular apps on customer devices. Venuemob was partly successful because of the telco’s interest in the ‘hyper-local space’ — just weeks before the first round pitch day, Optus announced it had acquired restaurant review platform Eatability for $6 million. It’s the sort of strategic partnership the fund is chasing.
“We want to hear from startups how Optus and Singtel can help them. It requires startups to do some digging, to talk with people in the space — that’s really important,” says Lo.
Hooper has recently spent time in Singapore, the U.K. and the U.S., meeting with potential partners, including the BBC, which he says invests heavily in new technology. 121cast recently welcomed Rob Skillington as a new developer, and is recruiting a design position. It’s also taken on three interns to help with data analysis, media relations and some of the company’s legals.
Optus Innov8 will hold information sessions for interested startups at Fishburners in Sydney and York Butter Factor in Melbourne next week. Startups in Brisbane, Adelaide and Perth can participate via teleconference. Check the information page for dates and times.
Australian startups can apply for for the program using www.F6s.com. Applications close on Monday 4 February.
The opportunity that Optus is giving the Australian startup ecosystem is most impressive. I really enjoyed this post and will be following how this program turns our closely
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